I like his linked "cliff businesses" where network effects are essential for their usefulness (canonical example that he didn't use: the first phone). I think

I like his linked "cliff businesses" where network effects are essential for their usefulness (canonical example that he didn't use: the first phone). I think many businesses have network effects as an adjunct to their initial usefulness, which can then fade away (like scaffolding) if a network effect of greater usefulness kicks in. Leaving you with what looks like a "cliff business". Of course, it's hard to plan even an ordinary successful business - let alone a two-stager. e.g. Zune's wireless song-sharing. It doesn't hurt to think about both aspects, and allow for the possibility in product dev, and present both aspects in marketing - at least it then has a chance to work. If it doesn't work (i.e. fails) it's no big deal.